We are energy in motion Investor presentation June 2019
We believe in a world where energy enriches people’s lives. We are Spire. 2 Spire | Investor Presentation – June 2019
Our energy is in motion Our mission Answer every challenge, advance every community and enrich every life through the strength of our energy. Our strategic priorities • Growing organically • Investing in infrastructure • Acquiring and integrating • Innovating and advancing technology 3 3 Spire | Investor Presentation – June 2019
We’ve expanded to serve more customers and markets • We’re the fifth largest publicly traded natural gas company serving 1.7 million homes and businesses across Alabama, Mississippi and Missouri • We are developing and growing our gas-related businesses – Spire Marketing – Spire STL Pipeline – Spire Storage 4 Spire | Investor Presentation – June 2019
We’re a growing, financially strong company • 5-year capital investment of $2.8B focused on infrastructure upgrades Delivering • Growing organically across our utility and gas-related businesses growth Targeting 4 - 7% annual long-term EPS growth • • Strong and growing cash flow Financial • Solid capitalization (51.6% equity) and ample liquidity via $975M credit facility strength • Solid investment grade credit ratings • Delivering total shareholder return of 142% 1 Superior investor • Growing dividend with attractive 3% yield returns • Increasing market capitalization by 4.4 times since 2012 1 For FY17 through first half FY19. 5 Spire | Investor Presentation – June 2019
We continue to drive growth in our gas utilities. 6 Spire | Investor Presentation – June 2019
Growing organically New premise activations 11,544 11,159 12,000 10,937 9,498 8,167 8,141 • Enhancing our approach to new 8,000 business and economic development • Increasing spend on new business 4,000 – Growing new premise activations – Expanding into new service areas 0 1 2014 2015 2016 2017 2018 2019 • Increasing margin via – Customer growth O&M expenses per customer 2 – Balanced and constructive $270 regulatory outcomes $270 • Controlling costs across our utilities $256 $260 $255 $252 $250 $244 $241 $250 $246 $240 $230 1 2014 2015 2016 2017 2018 2019 1 12-months ending March 2019. 2 Operation and maintenance (O&M) expenses and customers for Spire Missouri, Spire Alabama and Spire Gulf for all years. Expenses in orange for 2018 and 2019 exclude Missouri rate case items. 7 Spire | Investor Presentation – June 2019
Increasing our capital Capital expenditures (Millions) investment $740 $750 • FY19 capex target increased to $740M 250 $499 – Higher utility spend of $490M $500 43 95 63 – Includes $82M for utility new business • 5-year capex target increased to $2.8B $250 395 393 (thru 2023) from $2.6B (thru 2022) – Higher investment across all businesses $0 FY18 actual FY19 forecast – Diversified across our utilities • Focus on infrastructure upgrades 5-year forecast: $2.8B – Pipeline upgrade program with lives of $740 15-18 years 250 $520 $535 $520 $515 – Drives 6% long-term rate base growth 10 50 30 10 100 100 95 90 90 – Utility spend ~80% recovered with minimal lag or reflected in earnings 410 400 405 395 395 2019 2020 2021 2022 2023 Utility, with minimal lag Other utility Pipelines and storage and new business 8 Spire | Investor Presentation – June 2019
Inspiring innovation through technology • Completing our companywide information technology modernization • Leveraging technology and robust databases for – New business development – Targeting growth opportunities – Improving workload planning • Providing customers better ways to connect with Spire via My Account • Deploying robotic technology to inspect/repair distribution pipelines • Exploring gas detection technology • Opened our new Innovation Center 9 Spire | Investor Presentation – June 2019
Improving operating performance Investment in infrastructure upgrades, technology and our people are driving improved safety, system integrity and service. Reducing employee injuries Improving pipeline safety OSHA DART 1 rate Damage rate per 1,000 locates 4.84 4.78 4.76 3.66 3.65 4.24 3.22 3.92 2.63 2.39 2 2 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Enhancing service and safety Strengthening system integrity Average leak response time (minutes) Leaks per 1,000 system miles 174.0 32.4 28.9 141.9 28.4 26.8 25.4 99.7 75.6 68.6 2 2 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 1 Days away, restricted time. 2 Twelve-months ending March 2019. 10 Spire | Investor Presentation – June 2019
Progressing on regulatory initiatives • Reauthorizes Pipeline and Hazardous Material Safety Administration (PHMSA) Renewal of Pipeline • Focus on safety standards and mandates for system integrity Safety Act Congress will address later this year • • Working with Governor and state leaders to drive economic development • Recovering pipeline upgrade investments via ISRS Missouri – Current ISRS annualized revenues of $8M effective October 18 – Additional ISRS revenues of $13.2M authorized on May 3 • On track for AIM target for 2019, which would increase ROE to 10.5% in 2020 Alabama • Positive movement on 811 legislation 11 Spire | Investor Presentation – June 2019
We continue to develop our gas-related businesses to drive earnings growth. 12 Spire | Investor Presentation – June 2019
Growing Spire Marketing • Building a strong team in Houston • Logistics-based business supported by strong risk management • Delivers gas on 35+ pipelines • Expanding geographically and increasing customers and volumes • Strong first half FY19 performance, with NEE of $0.28 per share • Utilities account for 77% of customers (by net dollar exposure) 15% Spire Marketing locations in Houston, Oklahoma City and St. Louis Utilities 8% Producers 77% LNG and independent marketing companies 13 Spire | Investor Presentation – June 2019
Completing Spire STL Pipeline • On track for in-service by end of FY19 • Brings new gas supply to St. Louis – 65-mile pipeline connecting to REX – Enhances supply diversity, reliability and resiliency – Capacity of 400 MMcf/day with Spire Missouri contracted for 350 MMcf/day • Construction well underway – Completed major river crossings – Installing pipe (95% complete 1 ), metering stations, ancillary equipment • Project investment – Total costs: $230M - $240M – Investment to date 2 : $132M 1 Percentage of mileage completed. 2 Through March 2019. 14 Spire | Investor Presentation – June 2019
Developing Spire Storage • Integrating our facilities and finalizing the development plan to: – Seize expanded opportunities to serve variety of customers (utilities, power generators and producers) – Increase injection/withdrawal capabilities – Expand working gas capacity – Improve overall performance • Total investment to date 1 of $130M, including $56M in base gas • 1H FY19 loss of $7.4M; expect earnings contribution in 2H FY20 1 Through March 2019. 15 Spire | Investor Presentation – June 2019
We’re executing on our growth strategy to further deliver financial strength and performance. 16 Spire | Investor Presentation – June 2019
Delivering solid first half Capital expenditures (Millions) performance $400 $377 • 1H capital spend of $377M, up $161M 122 $300 – $136M for pipeline upgrades $216 50 – $53M for utility new business, up 23% $200 30 18 – $120M for pipelines and storage • NEEPS of $4.20, up $0.18 (4.5%) $100 205 168 • Gas Utility NEEPS, up $0.23 (5.8%) $0 – Higher margin from MO rate design change 1H FY18 1H FY19 – Slightly lower operating costs 1 Utility, with minimal lag Other utility Pipelines and storage and new business • Spire Marketing NEEPS $0.28, flat YoY – Benefits of geographic expansion Net economic earnings per share (NEEPS) 2 – Good market conditions, although less Six months ended March 31, opportunities than winter 2017-18 2018 2019 Gas Utility $3.94 $4.19 Gas Marketing 0.29 0.28 Other (0.21) (0.27) Total $4.02 $4.20 1 After removing non-recurring MO rate case adjustments and reclass of benefit costs. 2 See Net economic earnings (non-GAAP) reconciliation in Appendix. 17 Spire | Investor Presentation – June 2019
Adjusted EBITDA 1 Maintaining our strong (Millions) financial position $450 $413 • YTD FY19 EBITDA 1 $413M, up 12% $400 $370 • Ample liquidity from credit facility $350 and commercial paper program $300 • Solid LT equity capitalization 2 51.6%, $250 up 180 basis points from a year ago $200 1H FY18 1H FY19 Spire Spire Long-term capitalization 2 Spire Inc. Missouri Alabama (at March 31, 2019) Senior Senior Commercial Senior Secured Unsecured Paper Unsecured P-2 Baa2 Moody’s A1 A2 Standard A-2 BBB+ A A- Equity & Poor’s 48.4% 51.6% Debt 1 Adjusted EBITDA is earnings before interest, income taxes, depreciation and amortization, plus largely non-cash write-offs related to Missouri rate cases. 2 See Long-term capitalization reconciliation in the Appendix. 18 Spire | Investor Presentation – June 2019
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